Jezza
Member
Arms maker to provide defence force with 264 combat vehicles
Political Correspondent
CAPE TOWN — Struggling arms maker Denel has been given an R8bn vehicle contract lifeline by Armscor. This comes hard on the heels of its failure to win a bid to supply Turkey with Rooivalk helicopters.
Denel has now decided that the Rooivalk, on whose development the government spent R8bn, is not commercially viable and it will not spend any new money on the helicopters.
Armscor and the defence department will now have to decide whether to subsidise the maintenance of Denel’s Rooivalk capability so that it can continue servicing the 12 helicopters bought by the South African Air Force over their 25-year lifespan.
The other option would be for the air force to mothball the helicopters and for the costs to be written off entirely.
Denel group CEO Shaun Liebenberg announced Denel’s decision on the Rooivalk and details of the Armscor contract — the biggest in the company’s history — ahead of Public Enterprises Minister Alec Erwin’s budget vote speech in Parliament yesterday.
He said Denel would not be able to afford to look after the air force’s Rooivalk aircraft in the future.
“There are some big strategic decisions which the air force and the shareholder must make on this product. The government could decide to subsidise it because of the defence force’s operational requirements,” said Liebenberg.
Erwin said in an interview that the departments of defence and public enterprises would have to decide later in the year what to do about the Rooivalk.
The R8bn Armscor contract, known as Project Hoefyster, would see Denel Land Systems supply the South African National Defence Force with 264 infantry combat vehicles in five variants over 10 years.
The new-generation combat vehicle would replace the Ratel and would be based on a Finnish Patria platform with a Denel- designed turret. It would be an 8x8-wheeled vehicle in the 25-ton class to transport and protect infantry troops.
“The contract signifies a tremendous boost to local industry and the economy,” Liebenberg said. “This contract puts Denel Land Systems on the road to sustainability” as well as commercial viability. South African companies would deliver more than 70% f the total value of the contract, 18% of which would be for the development of the turret systems.
Denel as main contractor would involve numerous local defence companies and subcontractors such as BAE Systems’ subsidiary Land Systems OMC in delivering the product.
The vehicle itself would be built locally under a Patria licence.
http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A466341
Oh well, it unfortunately shows that it will become very much harder for the medium/smaller non aligned countries to do this sort of thing. Collaboration seems to be the only way forward when you are competing in this league.
Of course, if the South African Airforce were to order a second squadron, the above situation would change. This appears unlikely however.
Political Correspondent
CAPE TOWN — Struggling arms maker Denel has been given an R8bn vehicle contract lifeline by Armscor. This comes hard on the heels of its failure to win a bid to supply Turkey with Rooivalk helicopters.
Denel has now decided that the Rooivalk, on whose development the government spent R8bn, is not commercially viable and it will not spend any new money on the helicopters.
Armscor and the defence department will now have to decide whether to subsidise the maintenance of Denel’s Rooivalk capability so that it can continue servicing the 12 helicopters bought by the South African Air Force over their 25-year lifespan.
The other option would be for the air force to mothball the helicopters and for the costs to be written off entirely.
Denel group CEO Shaun Liebenberg announced Denel’s decision on the Rooivalk and details of the Armscor contract — the biggest in the company’s history — ahead of Public Enterprises Minister Alec Erwin’s budget vote speech in Parliament yesterday.
He said Denel would not be able to afford to look after the air force’s Rooivalk aircraft in the future.
“There are some big strategic decisions which the air force and the shareholder must make on this product. The government could decide to subsidise it because of the defence force’s operational requirements,” said Liebenberg.
Erwin said in an interview that the departments of defence and public enterprises would have to decide later in the year what to do about the Rooivalk.
The R8bn Armscor contract, known as Project Hoefyster, would see Denel Land Systems supply the South African National Defence Force with 264 infantry combat vehicles in five variants over 10 years.
The new-generation combat vehicle would replace the Ratel and would be based on a Finnish Patria platform with a Denel- designed turret. It would be an 8x8-wheeled vehicle in the 25-ton class to transport and protect infantry troops.
“The contract signifies a tremendous boost to local industry and the economy,” Liebenberg said. “This contract puts Denel Land Systems on the road to sustainability” as well as commercial viability. South African companies would deliver more than 70% f the total value of the contract, 18% of which would be for the development of the turret systems.
Denel as main contractor would involve numerous local defence companies and subcontractors such as BAE Systems’ subsidiary Land Systems OMC in delivering the product.
The vehicle itself would be built locally under a Patria licence.
http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A466341
Oh well, it unfortunately shows that it will become very much harder for the medium/smaller non aligned countries to do this sort of thing. Collaboration seems to be the only way forward when you are competing in this league.
Of course, if the South African Airforce were to order a second squadron, the above situation would change. This appears unlikely however.